4.2.5 - GLOBAL COMPETITIVENESS

Question 1

What is COMPETITIVE ADVANTAGE?

Answer 1

is a SUSTAINABLE ADVANTAGE OVER COMPETITORS Gained by OFFERING CONSUMERS GREATER VALUE, EITHER by MEANS of LOWER PRICES or PROVIDING GREATER BENEFITS and SERVICE that Justifies Higher Prices

Question 2

Explain £ APPRECIATION & EXPORTS

Answer 2

• As the POUND APPRECIATES (STRONGER) - Against Other Currencies - >UK EXPORTS To Other Countries will be MORE EXPENSIVE
• BUSINESS that EXPORT OUT of UK will Have LOWER SALES or May REDUCE PRICES In Other Countries to KEEP DEMAND Levels UP

Question 3

Explain £ APPRECIATION & IMPORTS

Answer 3

• As the POUND APPRECIATES - (STRONGER) - Against Other Currencies - >UK IMPORTS To Other Countries will be CHEAPER
• BUSINESSES that SELL IMPORTS will Have LOWER COSTS -> Thereofore will Enjoy HIGHER PROFITS

Question 4

Explain £ DEPRECIATION & EXPORTS

Answer 4

IF the POUND DEPRECIATES (Weaker) Against Other Currencies - it will Make EXPORTS to Those Countries CHEAPER

the BUSINESS Can DEICDE to EITHER :
- KEEP PRICE to OTHER COUNTRIES the SAME and Enjoy the HIGHER PROFIT
- LOWER PRICES to OTHER COUTNRIES and GAIN MARKET SHARE and MORE REVENUE from EXTRA SALES

Question 5

Explain £ DEPPRECIATION & IMPORTS

Answer 5

IF a BUSINESS IMPORTS WHILE there’s DEPRECIATION it will MAKE those IMPORTS MORE EXPENSIVE

Question 6

What are the 2 WAYS to ACHIEVE COMPETITIVE ADVANTAGE

Answer 6

• LOW COST LEADERSHIP
• DIFFERENTIATION

Question 7

Explain how COMPETITIVE ADVANTAGE can be Achieved through - LOW COST LEADERSHIP

Answer 7

• Seek to PRODUCE the SAME QUALITY PRODUCTS As Competitors at a LOWER COST
• Industries Typical of the Standard Mass Produced Items
• LARGE BUSINESSES Do this As they Can BENEFIT from the LARGEST REDUCTION in AVERAGE COSTS and EOS
• May Gain COST LEADERSHIP DUE to : - Good Resources Management. - Efficient Production Methods - Waste minimisation

Question 8

Explain how COMPETITIVE ADVANTAGE can be Achieved through - DIFFERENTIATION

Answer 8

• Business PRODUCES UNIQUE PRODUCT/Service
• SIMILAR But Each will have SOME Attriubtues which SET ASIDE FROM COMPETITION
• with a UNIQUENESS the Business CAN CHARGE a PREMIUM PRICE to It’s MARKET SEGEMENT